Idled lumber plants may get second life in bioenergy business

Canadian-owned Ainsworth Lumber Company permanently shuttered its plants in Bemidji, Grand Rapids and Cook earlier this year, and now those communities are wondering what's next for the huge, idle plants.

Things are tough right now for northern Minnesota's wood products industry. Demand for lumber is near an all-time low. Some entrepreneurs are betting the answers will be found in biofuels and the emerging green economy.

The former Ainsworth plant in Bemidji once churned out a plywood-like product called oriented strand board. Now the factory is eerily quite, except for the high-pitched hum of the overhead lights. But that will soon change.

A Bemidji company called The Idea Circle has purchased the plant and plans to turn it into a bio-energy park for emerging green businesses.

Vice president Robin Larson plans to reuse one of the plant's biggest assets -- a row of huge dryers, once used in the manufacturing process.

"They're 10-feet tall, they're 60-feet long," she said. "There are three of them and they have the capacity today to be able to handle 300,000 tons of woody biomass a year.

Larson said that woody biomass -- including everything from tree limbs, tree bark, and even dead wood -- could be converted into wood pellets. It's a fuel that's become popular for heating homes and businesses in Europe but has so far been slower to catch on in the U.S.

Robin LarsonMPR Photo/TomRobertson

Company officials say the former Ainsworth facility is ideal for producing wood pellets or other bio-based fuels. The existing building is 400,000 square feet; about the size of four football fields, all under one roof. There's a railroad spur and a 12.5 megawatt co-generator capable of producing electricity.

This facility might be a good investment, but it's risky for The Idea Circle, a workforce development company that's never invested in a venture this size before.

CEO Mary Eaton is tight-lipped about other potential tenants, but said several enterprises will be up and running by next year. The company is exploring relationships with manufacturers, higher education, research and testing services and other companies interested in using northern Minnesota's forest resources for renewable energy.

Eaton said the political and social climate in the U.S. makes it a good time to invest in renewable energy. She said there may be stimulus money or other government incentives available down the line but for now the venture is being funded by private investors.

Ainsworth OSB plant in BemidjiMPR Photo/Tom Robertson

"It's a calculated risk whenever you do something of this nature, but I do think it's inevitable," Eaton said. "I think in the 70s we went through a crisis and oil prices came down and we all forgot about it. And now we've gone through another couple of crisis and we really believe that the United States is ready to step up and look at alternatives."

Those same green energy ideas are being floated at the other two former Ainsworth plants in Cook and Grand Rapids, both of which are still for sale. A non-profit group called the Itasca Economic Development Corporation might purchase the plant in Grand Rapids. Interim President Diane Weber said wood pellets and other green industries are at the top of their list.

"Oh if not now, when?" Weber said. "With the money that's available these days [and] the incentives for renewable energy companies and green companies, there's never going to be a better time."

Some in the wood products industry are cautious about the pace of biomass energy development. Wayne Brandt is executive vice president of the Minnesota Timber Producers Association. Brandt said he supports bioenergy, but the industry should focus on using the main parts of trees for high value products like oriented strand board, lumber and paper.

Idea Circle CEO Mary EatonMPR Photo/Tom Robertson

"What we would like to see is the bioenergy markets develop naturally so they are sustainable over time, and not be forced to where the economics don't make sense long term and you have projects starting up and shutting down," Brandt said. "In the case of ethanol, we've seen ethanol plants built that have never run, so we wouldn't want to see that happening in this area."

Brandt said things like wood pellets and other biofuels add value to northern Minnesota's forests, but it isn't enough to save the timber industry from its current slump. That will depend largely on whether the nation's housing construction market makes a rebound.